Why You Should Let Your Kids Fail

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FIRECracker

FIRECracker is Canada's youngest retiree. She used to live in one of the most expensive cities in Canada, but instead of drowning in debt, she rejected home ownership. What resulted was a 7-figure portfolio, which has allowed her and her husband to retire at 31 and travel the world. Their story has been featured on CBC, the Huffington Post, CNBC, BNN, Business Insider, and Yahoo Finance. To date, it is the most shared story in CBC history and their viral video on CBC's On the Money has garnered 4.5 Million views.
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You should let your kids fail.

OK let’s back up a bit. I know that’s a strange statement. But a reader sent me this article recently:

37% of young homeowners borrow from ‘bank of mom and dad

For those of you who are too lazy to click the link, I’ll give you the gist of the story. Basically, an HSBC survey found out that as many as 37% of Millennials borrow from the “Bank of Mom and Dad” to buy a house in Canada.

And get this: despite the fact that as many as 73% of buyers haven’t even STARTED to save for a down payment and more than 25% have NO IDEA how to make a budget, 82% of the Canadian Millennials who don’t own a home STILL plan to buy one within the next five years.

Super.

So how exactly are these clueless Canadian Millennials planning to deal with any unexpected home ownership costs?

“21 per cent of them hit up their parents to help them pay for other unexpected costs after they had purchased homes. “

That’s right, Boomers, your juicy arteries better be flowing because your vampiric Millennial children are coming to suck you dry. Bye bye, retirement dreams! Bye bye! (And my friends wonder why I’m terrified to have kids. *Eye roll*).

Now, to be fair, Millennials aren’t completely to blame here (yeah, yeah, I know being a Millennial makes me biased but hear me out). If all you do is make it rain every time your kid asks for money, what did you expect?

Now, I know parents reading this blog are sharpening their pitchforks and lighting their torches right now, but I’m still going to say this:

The best way to screw up your kids is to give them money.

How do I know?

Well, let me tell you a story.

Back in Malaysia, we met an American couple who were travelling the world, just like us. The guy, Nick, seemed to have the same obsession with travel hacking as I did and we quickly bonded over frequent flyer points. That fact was already surprising enough, but what surprised me even more was his backstory.

You see, unlike me, Nick grew up rich. He never had stomach worms, didn’t have to play in medical waste, or use a coke can as a teddy bear . By the time he was in grade school, his Dad made 6-figures a year. And by the time he was in high school, his Dad made $300K a year.

But making big bucks is one thing. Keep it is another.

During his final year of high-school, Nick’s Dad’s company downsized and he suddenly lost his job.

Having never had to worry about money, Nick’s Dad never learned how to save it. So instead of a healthy bank account, all he had was an over-sized McMansion (that he never bothered to pay off), a BMW (again not paid off), and a thick stash of maxed out credit cards.

So when Nick asked his Dad for help with his tuition, he simply shrugged. “I just lost my job, son. You know I can’t help you. I’m broke.”

Nick looked around at the McMansion, the spotless marble floors, the sparkly chandelier, and the brand new BMW M6 (is that good? I don’t know anything about cars) in the driveway.

“Yeah, but couldn’t you sell your car or at least get rid of the maid?”

“Sorry, bud. No can do,” his Dad said, leaning back in his LazyBoy chair and taking a swig of his favourite Scotch. “I need them to live.”

My prreeccious. Oh and you’re okay too, Nick (photo credit: Shawn Jooste @ wikipedia.org)

Nick had no choice. So he went to his school councillor, who taught him how to take out a student loan. After that, he got a minimum-wage job so he could pay off his loan while getting his degree. He selected Chemical Engineering because he heard there were plenty of good jobs out there for him after graduation. Messing around with a “risky” degree was NOT going to be an option now that the bank of Dad was firmly closed.

“Does that make you bitter?” I asked. “The fact that your dad wouldn’t help you out?”

“Are you kidding?” He said. “That was the BEST thing that ever happened to me.”

“Really?!” I asked.

“I know it didn’t feel like it at the time, but because of it I learned how to save my money. And now I’m the only one in my family who has his shit together when it comes to my finances.”

“How so?” I asked.

“Well let’s see,” he said, ticking off the items on his fingers. “My aunts and uncles are all in massive amounts of debt. My cousins all have maxed out credit cards and don’t know their ass from a hole in the ground. My Dad has declared bankruptcy…twice”.

Crossing his legs, he leaned back against the pool lounge chair, a satisfied smile on his face. “But me? I paid off my student loans a year after graduation. And now after working for 10 years, I have enough money to live abroad and never work again.“

“You’re kidding, right?” I couldn’t believe it. Another couple just like us?

“That’s why I’m here, travelling the world with my wife. Everyone else back home is stuck in their crappy jobs, terrified they’re going to get laid off.”

Staring up at the cloudless blue sky, he sighed happily. “My Dad being a dick and not giving me money for college was the best thing that ever happened to me.

I blinked in amazement. First at the fact that we met another couple like us, just hanging out at the hotel pool, and secondly at the fact that even though Nick and I had vastly different upbringings, we had one thing in common:

Our parents made us stronger by not giving us money.

Nick learned how to budget, because he HAD to. He learned how to pay off his debt, because he HAD to. He learned how to support himself without having a job, because he HAD to.

And I know what that’s like.

Like Nick, my parents never gave me money. Not because they spent it all, but because they had no money to give me in the first place. What little money they earned had to be sent back to relatives in China.

But even though I grew up poor, I’m not bitter about it. Just like Nick isn’t bitter at his Dad for not giving him money.

Because regardless of growing up rich or poor, not getting hand-outs helped us understand money. We HAD to figure it out, because neither of us had any safety net to fall back on. You either mastered your money, or you starved to death on the streets. That was our reality.

They say that necessity is the mother of all innovation. And that was definitely true for Nick and me. Neither of us went down the path of FI just for shits and giggles. We did it because we realized how dangerous it was to live a life in which someone else could destroy us with a flick of a pen.

Whether it was our boss, our banker, or our own family, nobody, NOBODY should wield that kind of power over us. That is what we fundamentally believe. And that is why Wanderer and I write this blog. Because we believe that nobody should have that kind of power of YOU as well.

So to the parents out there reading this weird little blog: Don’t be so eager to help your kids out financially when they run into problems.

And to the scared Millennials wondering what would happen if they didn’t have their parents’ support:

You are stronger than you think.

And that’s why I believe you should let your kids fail.

What do you think? Should parents help kids out financially?

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62 thoughts on “Why You Should Let Your Kids Fail”

  1. Hi Firecracker,

    I am not sure whether you can still remember me. I am the one who previously mentioned that I have achieved FI and can quit any point of time. I managed to accumulate the coffers after almost two decade of hard work. I don’t have a rich benefactor.

    I currently hold a full time job and this job is about to be given to another third party due to organisational restructuring. I am about to be jobless soon. However, I do not feel helpless as I am financially prepares for it Being single also goes to great extent to handling the upcoming “crisis” with much needed confidence.

    Ben

  2. This is true as a kind of general concept, not just applied to money (although obviously finances are the thrust of your focus here). Failing (and failing fast, preferably) is how you figure out an approach doesn’t work.

    Kids are smart though – even at 3, our oldest seems to have the general idea that we’re not hard up. One of the forms of boundary testing she does it to tell (ask?) us to buy her stuff that she wants, which is fun to explain 🙂

    1. That’s true. It’s not just in the sense of money, but failing in general and learning how to get back up.

      Kids are definitely smarter than we give them credit for. When your oldest asks you to buy her stuff, how do you explain it to her?

      1. Some percentage of the time (definitely < 5%) the answer is yes but generally after some discussion. Most of the time it's no and some sort of explanation – for example she told me this weekend that she needs more shoes (not new ones) just more.

        The challenge is that kids are relatively good at forms of social ranking. Eg a lot of her friends live in 1-2 bedroom apartments, not in houses. We're not keen to live in 700 sq ft with 2 kids and we have the choice. Kids get this pretty intuitively.

        1. So if they know you have the money and can afford it, it’s hard for them to understand why you won’t splurge?

          Do you think it’s makes sense to do something like: you pay for 50% of the shoe costs and she has to earn the money to pay for the other 50%? I don’t have kids, but I always wondered whether making them work for at least half of the cost of the item would work.

          1. Heh. Well, she’s only three, so I doubt she’ll be earning the money (yet 🙂

            That’s also part of the reason why it’s difficult to explain sometimes, as she hasn’t quite learned to separate ‘want’ from ‘need’, although she is socially aware enough that she’s usually quite empathetic towards her little friends when they’re not doing so well.

            My wife and I both paid our own way, more or less (I had some parental help in university, but it was < 20% of my cashflow) and we feel that it encouraged us to be more focused, so we see some value in having them pay their own way where possible. Our primary goal is just to ensure that our kids don't have to support *us* in retirement, not to leave them set for life, and definitely not to give them tonnes of useless crap they don't need. 🙂

          2. The key is that you have to understand that they have to work for their wants. You can provide their needs… But you don’t have to cater to their wants.

            Growing up, my dad always had a stable job, very secure blue-collar work. They were very generous with us and we went on vacation every year… however when it came to buying things for us, they would buy the necessities and if we wanted something more than that, like some brand name shoes we would have to come up with the difference.

            We also always paid about 25% of our paycheque as room n board, even while still in high school.

            I used to feel that in Vancouver, Asian kids were doted on by their parents. I was envious because they didn’t have to pay anything like room n board and their parents bought them anything they wanted… but I’m grateful now. Recently this materialistic attitude has permeated all cultures. You have to fight the attitude. And I am not some old grumpy dude, I’m in my 30s

            Kids don’t want or need “stuff” from their parents… even if they say they do. What they really want is time and attention. If you have kids and think that means both parents now have to work because kids R “expensive” you’re doing parenting wrong. In many if not most cases, a tiny bit of sacrifice on the behalf of one parent will result in far more socially responsible kids. And that’s the best gift you can give. Time. Love. And Attention.

  3. Truth! I had a similar experience with college and a lack of “parental support”, so I worked full time at a state university and got by B.A. at night. I don’t think it would have been as beneficial to have had my parents pay for my living expenses and tuition for four years. And when I graduated, I happened to have a resume with real work experience.

    1. Good for you! Totally with you there. I lived in some shitty basements in university to save money. Would never have done that if my parents gave me hand-outs. But as a result, that adaptability has served me well in life.

      People don’t realize how useful it is to have work experience right when you graduate. It’s rough when you have to work and study, and in the case of co-op programs, it delays your graduation by a year, but SO worth it.

  4. “stomach worms”, “play in medical waste,” or “use a coke can as a teddy bear”

    ——-

    Well, I say that you were lucky. I wish I had those when I was growing up. We were probably even poorer than you. Once you have been touched by the misery of abject poverty, you never forget it.

    1. Oh wow, I didn’t know poverty was a competition.

      “you were luck to have stomach worms, I wish I had those things growing up”. Weirdest comment ever.

    2. Stomach worms!? Luxury! We used to live in an old water tank in a rubbish tip! We got woken up every morning by having a load of rotting fish dumped all over us!

  5. Great post FireCracker! I like this one, because Nick’s story echos my own.

    Like Nick, I didn’t have a”bank of mom and dad”. I had to earn my money or starve if I screwed up. I had to borrow all the money for college, and then pay it back again. I had to save for my first junker car. I had to save 20% for my first downpayment. I had to live through lean times on rice and beans.

    The guys who claim financially independence after getting college, a car, and a house down-payment from mom and dad? Ha! That’s not independence at all.

    It’s like playing monopoly, landing on Boardwalk and then claiming victory when you reach “Go!” first.

    So, I’m with you on this one FireCracker . We can “gift” our kids a lot of things in life, but the gift of self reliance and financial “experience” is pretty priceless.

    Sure, other kids might get to “Go!” first, but that’s not the end of the game. Life has a few more turns around the board.

    1. “The guys who claim financially independence after getting college, a car, and a house down-payment from mom and dad? Ha! That’s not independence at all”

      So true. Being born financially independent isn’t the real deal. Easy come. Easy go.

      Good work earning all the money yourself instead of getting hand-outs. I see this pattern time and time again with early retirees. Without having to work for it ourselves, we would’ve never learned the skills to become FI.

  6. I agree with the general concept of not spoiling your kids but I still think helping your kids out (to a moderate degree) is good. I worked my way through college (almost done paying off student loans) while my wife had hers paid for by her parents. We are both very financially responsible. I also have plenty of friends from “the hood” who never got a dime and still live paycheck to paycheck, spending whatever they get their hands on. People are all different, kids are all different. Some will appreciate the help, some need to struggle to learn. The tricky part is being able to adjust your parenting strategy to your kid.

    1. As a parent you can only do so much. At the end of the day, it’s still the kid’s choice whether to learn how to become financially responsible, or throw up their hands and say “why me?” and wallow in misery without doing anything to change their situation.

      Helping to a certain extent is fine, as long as they’re not spoiled into thinking they will always get free handouts.

  7. My mom’s friend always bailed her kids out. Credit cards, unpaid rent you name it. And now both of the kids are the most incompetent kids I met. Where me and my sister were never given as much, and learned how to save and manage our own finances.

    1. When they make it too easy, of course the kids are going to take the easy way out. Who wouldn’t? Try telling that to an enabling parent though.

      Glad you guys learned how to manage finances on your own. Very useful skill in life.

  8. Lucky for us, we’re not having kids so I don’t have to worry about this decision. It’s a tough one though. I definitely agree with concept of letting kids fail. Boomers and Gen X have tried their best to ruin a generation by giving them gold medals no matter how shitty they performed.

    I myself grew up in an upper middle class family. My parents paid for my college. But I never felt like I deserved this and never asked them for a dime. I know plenty others who grew up in similar families to me who are spending every bit of their paychecks today to keep up with the Jones’. I know others who paid their own way but once they graduated and found jobs paying decent money, they too did their best to spend every penny.

    Teaching kids the value of money is important, and spoiling kids will do them no good. As far as paying for bigger expenses like college, it depends on the kid. Some will take it for granted others will recognize the huge head start they get and make the most of it.

    1. Interesting. So what is it that made you not fall into the trap of asking your parents for money after graduation? Would they give you hand-outs if you asked for it?

      1. I was raised very old school. My parents took care of me financially, but they were very hard on me. I was expected to be the best at whatever I did, be it sports or school. I still remember getting my ass chewed for getting a B- in 6th grade science. It was way different from how I see my nephews raised today. They are beyond spoiled, and just laugh at my sister when she tries to discipline them.

        My dad would buy me a nice bat or glove for baseball, but outside of that they didn’t go around just buying me stuff. If I wanted something I had to save up my own money or hope I might get it for my birthday or Christmas. Again, very different from how I see kids being raised today who have their own iPad, iPhone, etc. I think because of this I never really expected anything from them. They paid for my education which was awesome, but it wasn’t like I was always running around with my hand out and they would give me what I wanted.

        There’s no right answer as a lot of it depends on the kid. I think a lot of it is how you raise your kids and teach them about responsibility and money.

        1. “If I wanted something I had to save up my own money or hope I might get it for my birthday or Christmas.”
          See, that’s the key. Your parents paid for your college education but they didn’t shower you with money. You had to work for it. People who are always given money freely don’t associate money with the time spent to earn it.

          Thanks for sharing your story! Very eye-opening to see how other people were raised.

    2. GFY, As a gen Xer, I take umbrage at this comment! But I understand your larger point. We try hard not to raise our 11 year old kid privileged but some trappings of financial success are visible in our lifestyle. We try to balance between luxury and penury – deliberately – so that the kid doesn’t take anything for granted. Even gifts come with expectations and earn-outs. He is now an avid saver, has his own bank account and wants me to check periodically if the bank is using compound interest and not simple interest! It’s too early but remind him periodically that a solid education and hard work is required for financial success.

  9. That’s exactly how I’m raising my kid. They have to learn very early in life the real value of money…if someone gives them they’ll never learn it is a finite, very hard to earn and easy to lose kinda thing!

  10. It’s going to be tough the richer we get because everybody’s getting richer and this bull market.

    But the most obvious signs of wealth for your child is your house in your car, so it might be a good idea to live below your means regarding housing, but have tremendous Wealth that cannot visibly see be seen.

    If feels like most millennial’s today know that their parents have money given they invested in the greatest bull market in our history. There’s a good survey that shows the typical millennial expect in here at $1 million. If that’s the case, can you blame them for not really working too hard?

    I can’t.

    Sam

    1. I think this is why Millennials keep getting the reputation of “entitled, selfish, etc”. Because their parents think “hey I have money, the kids should be entitled to it.”

      If you are wealthy and your kids wants something, they should at least have to work for 50% of the cost, and you put in the other 50%. Otherwise, they’ll just end up being lazy brats.

      And yes, I can blame them for it. If I end up with a lazy brat, I might as well not have kids at all. That’s just a plague on society.

  11. It’s a tough one. Already we have a chunk in miracle baby’s resp (educational savings). My parents had money but expected me to pick myself up by my bootstraps. Lots of spaghetti and red sauce and some hard choices had some good advantages, though I would like baby to have better food and never feel stuck in a bad situation, although I would like her to be strong and independent. I think this is something to assess all the way along. For now she wears hand me downs and has used toys and some new, but no stomach worms or medical waste 😉

    1. “but no stomach worms or medical waste…”
      Though apparently, some people in this thread actually consider that “lucky”. *eye roll*

      Good for you for not spoiling MB (Miracle Baby ;)). I think some educational savings is fine, as long as it’s not “hey you can hit me up for cash whenever you want” money.

  12. Instead of letting their kids fail, how about teaching them to budget. Oh wait, because 25% of the parents out there probably don’t know how to create a budget. Nick’s dad is a perfect example.

    You have a certain degree of responsibility as a parent to provide for your child. Constantly bailing them out of financial crises is not one of them. But don’t blame the kid if you didn’t attempt to provide him/her with the right tools.

    Do your best to give them the tools they need to succeed financially from an early age. The importance of creating a budget and the power of compounding interest is a good starting place.

    That’s all you can do as a parent. Then you just cross your fingers and hope for the best because, as their parent, you are only one influence in their world that they take for granted by the time they reach pre adolescence.

    Unfortunately, your influence as a parent has some strong competition. Peer pressure and the marketing they are bombarded with every day that encourages them to buy stuff they don’t need. The credit card company reps sitting there ready to sign them up as they walk onto that college campus for the first time. It’s all out there waiting to undermine your hard work as a parent.

    If you don’t want to “Let your kid fail”, then at least don’t set them up for failure through your own actions or lack of action.

    … Says Gen Xer with no kids.

    You parents have your work cut out for you.

    1. Well said. And yes, parents definitely have their work cut out for them. It’s a tough job and very easy to get blamed for doing it wrong. That’s why the idea of being a parent terrifies me.

  13. This article had my name all over it! I work in pediatrics and specifically with really young children who are just learning to roll, sit up and walk. So much of what I do is allowing kids to (safely) fall and fail so they learn to pick themselves up, figure things out for themselves and all the while become independent. These are such important skills to learn! I’ve actually even considered writing a post about the importance of letting kids fall. Great minds…

  14. Great article.

    Kind of reminds me of that age old sociological debate of “nature versus nurture”. My brother and I were both raised by the same parents with similar upbringings, and while my parents worked hard to create opportunities for us, we both turned out different.
    Me: worked through high school and university; lived at home so I didn’t have to pay rent going to school; hooked myself up with a part time job where the company PAID for my degree (yes, you read that right) and wouldn’t schedule me when I had classes or exams. Brother: Moved out and didn’t even complete High School; struggled putting in the effort to work steadily at any job; had more children than he can afford to feed.

    I have zero debt and a decent portfolio because I can’t count anyone but myself. Even though I know my parents would bend over backwards for me – THEY SHOULDN’T HAVE TO.

    My parents DEFINITELY helped me out: rent free in University? Hells yeah!! Let me stay a little longer to save up a downpayment for my first condo? Yup, that too. I like to think that I am where I am today because they helped enable success and didn’t wash away my failures. And I made quite a few along the way as well – no saint here – and believe in the value of failure as a great teacher.

    I approach my folks with a sense of gratitude and humility. To do anything else is a bit of a douche manoeuvre and doesn’t respect their sacrifice. Kind of makes me wonder if my badassity quotient would be a lot higher if had to learn a few more lessons from the school of hard knocks.

    PS – need to change my nickname after this post. I sold the Montreal condo (case study in October) and am happily renting in the stoopid Toronto market. Zero debt and moving the balance of the sale into a professionally managed investment portfolio. 🙂

    1. Hi MontrealDilemma! Good to hear from you!

      “if my badassity quotient would be a lot higher if had to learn a few more lessons from the school of hard knocks.”

      This is an awesome sentence, I must say. 🙂 Also, very interesting story about you and your brother. Just curious, which one of your is the older one? Sometimes the order in the family affects how the person turns out.

      Congrats on becoming debt free and joining the renters club! How do you like the new job/position?

      1. I am the younger of the two by 5 years. The new position is good, with a few fire drills not withstanding. Although I have not been running around with my hair on fire, it has been a bit singed… which I was prepared for. It’s easier to deal with this being at the centre of the action than at a satellite office.

        Now comes the interesting part: hatching the financial plan with professionals that are a lot smarter than me. I came to the conclusion that I knew enough about investing to get me this far, but now need professional help to get me through that next leg to true FI.

        It’s nice knowing that I have a few pesos in the bank in case I ever need the FU money. The benefits of renting. 🙂

        1. Glad you are enjoying the new position! Nothing beats having F-U money when taking on new challenges.

          Back when I was working, my boss kept asking when I was going to buy a house and telling me to “lock in the rates while they’re still low”. Didn’t listen, kept renting. Later found out that he wanted to stick me onto this really bad project that was on fire and needed a scapegoat. But because I didn’t have a massive mortgage hanging over my head (like my co-workers), I was able to dodge that bullet. (Said no to the project, didn’t get fired. HA!). Some poor sad ended up working on it and hated it so much he threatened to quit on a daily basis…but couldn’t…because he NEEDED the job to pay off his massive mortgage.

          This is why I love renting so much. F-U money = power + freedom.

  15. Failure is indeed a great teacher. Many of the millennials surveyed are dreamers destined for failure, and financial aid from their parents will be squandered.

    1. It’s sad but true. Considering how so many of them don’t know how to budget and haven’t even started saving for down payments. All they are hedging on is the bank of Mom and Dad. This will not end well…

  16. “We did it because we realized how dangerous it was to live a life in which someone else could destroy us with a flick of a pen.

    Whether it was our boss, our banker, or our own family, nobody, NOBODY should wield that kind of power over us.”

    That is why even though my dad offered to pay for university I refused to accept the offer. My parents had money but they were generally very stingy and controlling with it. My dad bought a third car so that I’d have something to drive when I turned 16 and I wanted nothing to do with it because I knew it was basically going to be something that they’d use to make me jump through their hoops. I was a good kid with good grades and I never got in trouble at school or with the law but nothing ever seemed good enough for them and anything extra that was offered was always this trap where if I admitted that I wanted it then they would threaten to take it away at any moment for any reason they could think of – and they could always think of a reason. Growing up with my family I learned to never show that I was happy or upset because both could be used against me. I would have preferred so much more to grow up in a poor family with loving, supportive parents. I moved out at 19 and made it completely on my own and have never accepted my parents’ help since because there are always strings attached and I don’t want anyone holding anything over my head.

    1. Yikes! You have tiger parents! (have you ever read Amy Chau’s “Battle Hymn of the Tiger Mother?” I found it very relatable) Good for you for making it on your own. I guess the silver lining is that it made you stronger, not weaker.

  17. Teach your kids financial acumen and to have pride.I could never ask for financial help for anything because I was brought up old school European and couldn’t look myself in the mirror knowing that I was making the family look bad.My parents success was me being successful so I learned how to recover from failure,earned my PHD(Purpose Hunger Drive) through lots of trial and error,was on my own at 16 and never looked back,lots of pride in being able to do that all on my own and that can never be taken away.I have instilled that same sense of resilience in my kids and will give them no help(financially)either,and they are earning their PHDs too!

  18. I grew up in Toronto in an upper middle class neighbourhood with upper middle class parents surrounded by upper middle class family friends. While letting your kids fail is definitely part of equation, I think there is more to it. While by no means a large sample size, I’ve seen friends go on different financial trajectories. The ones who seem to be most financially independent and least dependent on economic outpatient support are those who were allowed to fail, AND had parents who modelled values of frugality, financial freedom, and financial responsibility.

    For example, I had friends with wealthy parents who let them fail but also spent lavishly on their (parents) own lives; many of these kids ended up bitter towards their parents (“You waste your money on stupid stuff and won’t even help me with tuition?!?!”).

    Other friends had wealthy parents who didn’t help with tuition, but talked about saving money for early retirement or to gain financial freedom. My own parents encouraged us to get scholarships and save up money from part-time jobs as soon as we were turned 15 and got a social insurance number, because their money was going to be used to create scholarships for kids in countries where scholarships don’t exist. Besides, they explained that they paid more money in housing for us to live in a good neighbourhood so we could go to a good public school so we could get into a good university and earn a good living…and that was where their financial responsibility to us ended. It’s hard to whine when the comeback is, “So you mean you want me to take money away from supporting starving illiterate kids in Africa so that you can buy a new car?”

    In Nick’s case, his dad wasn’t actually wealthy by the time Nick needed money for college. But in many cases of well-off families, parents still have lots of money when the child is old enough to want a car/house/university education. In these cases, having parents model values-based spending/saving helps kids not to feel resentful when parents choose not to help financially.

    1. Wow. Your parents are saints. Awesome 🙂

      And yes, I get that some kids will react negatively if their parents choose not to help them out. But if they were to help them out, who’s to say they would react positively either. Attitude counts for a lot. If someone chooses to be bitter, regardless of whether they get financial help or not, they will be bitter. And there are others, like Nick, who chose not to be resentful but to make something of themselves will find a way around obstacles no matter what they are.

      So you are right, different people will react in different ways. But people who react negatively, will end up failing in life regardless of whether they get help or not. Because as soon as something they can’t handle gets thrown at them and they don’t get help, they throw up their hands and give up. Life isn’t perfect and help won’t always come. Sad but true.

  19. This article really hits home for me as the paradox between my wife and I is exactly as described. I was raised by parents who were working class, didn’t really have much money and certainly couldn’t spoil us as children. We weren’t poor but we couldn’t afford life’s luxuries. We rarely went on vacation (my wife is always shocked why I never saw much of Europe despite living there) and very rarely ate meals out etc. Going to the cinema was a big deal and a once or twice a year event. I had to take out huge loans to attend University and save for months to buy a crappy car.

    My wife, on the other hand, was spoiled rotten (by her own admission). She has traveled the world (from Canada) with her parents, had her university education paid for in full and before meeting me had a car bought for her and her brother, including insurance coverage, gas etc. as well as all living expenses covered like cell phones and basically anything she ever wanted. Even now she would be spoiled if she allowed it, but she has tried her best to cut the chord since meeting me and avoided the temptation of accepting financial help from her parents.

    It’s been kind of a shock to my wife moving into adulthood and leaving the warm embrace of her parents. She didn’t appreciate just how much everything would cost, how big of a deal it was to spend thousands of dollars on an iMac with 5k retina display, how expensive vacations to Europe costs and how much it would set us back to go back to University. She certainly still wants life’s luxuries but she is realizing it’s not so easy now and we have to put the work in to get them.

    Thankfully she is pretty on board with my FI goal but every now and then her spoiled nature shines through and I have to try and bring her back down to earth. Even if we could afford all of the luxuries her parents threw down on her, we wouldn’t want to waste money like they did/do. We now both appreciate the true value of money and if anything are more like my parents who struggled to spend money freely (through choice or not).

    If I had to pick one way or the other, I’d choose my upbringing every time. I think my wife’s parents inadvertently gave her an entitled complex of having anything she wants with little or no effort. Life doesn’t work that way and thankfully she has now realized it and is putting in the effort to achieve the life she wants now.

    1. “If I had to pick one way or the other, I’d choose my upbringing every time.”

      Me too. Having to work for your own money makes you stronger, not weaker.

      Glad your wife is coming aboard the “earn it your own goddamn self” train.

  20. This was a thought provoking article.

    Many of us have had rough childhoods were lack of money was an real issue. It shaped us for the better but every time I hear wealthy successful people talk about their childhoods they seem to be deeply scared by it. Something they can’t seem to get over.

    I know many parents go overboard helping their kids because they don’t want their kids to experience the same pain. Don’t agree with it but understand where the parents are coming from. For example, know several couples that paid for their kids’ university education. They did it because they couldn’t afford to go to university when they were young. Even today 1st year drop out rate is like 40%, many can’t keep up with school demands and part-time jobs. We are all not superhuman. I know many people that were able to graduate with degrees not because they were the smartest students but because they had the financial resources to hang in there while they figured it out. Most of these people are successful professionals now and appreciate what their parents did for them.

    Parents will always try to set their children up for success. It’s up to the children to realize that they are sitting in the shade under a tree because someone who loved them had the foresight to plant a tree years ago.

    It’s up to the children if they want harvest fruits from the tree regularly or take a chainsaw and make some money selling firewood.

    1. “It’s up to the children if they want harvest fruits from the tree regularly or take a chainsaw and make some money selling firewood.”

      Perfect analogy. Couldn’t have said it better myself.

      Kids who would rather sit back and let their parents do the work, helping them only hurts them. Kids who appreciate the short-term help and become independent end up thriving.

      But it’s a lot easier to sit back and NOT do the work, if your parents make it so easy that you don’t have to. That’s the issue. The more often you had over the money, the less incentive kids have to actually work for it.

  21. My wife’s very Chinese, so heavy emphasis on education and training for the children. We’ll pay for the daughters’ undergraduate expenses in full. They’ll have a good start on skills for their adult lives. That makes my wife happy.

    I’m very Midwestern (US) frugal, so emphasis on real-life experience and eustress. We’ll fund an initial set of household accounts on graduation, gift a portfolio sufficient to generate $100 monthly five years later, and train them on budgets and simple investing along the way. They’ll have a good start on finances for their adult lives. That makes me happy.

    To make those happen, though, they’ll borrow for all the expenses, and we’ll gift them repayments as money comes available from current income and investments. We’ll donate the goal of “be student-debt-free by thirtieth birthdays”, which we think is doable while still coasting to FI at normal retirement age. The debts make none of us happy, though our cash-flow requires it. (Bonus lesson for them about trade-offs ….)

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